2010 stock market money map - wallstreetwindow.com · and this year we have been in the middle of a...

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2010 Stock Market Money Map January 4 th , 2010 marks my birthday and the first trading day of not only a new year, but a new decade too. Right now you can go to the newsstand and see all of the financial publications promise to give you their predictions for 2010. They do this every year and almost every year all of the experts say the market is going to go higher. The only thing they really dispute is how high they think it will go. Really I find such predictions fairly useless, because they don’t tell me anything about how to make money. Instead of making predictions for you, I want to spend this time of year looking back at what lessons we need to learn from the past year and then make a plan on how we can best make money in 2010. Every year the market changes a little bit and new sectors rise up to lead the market no matter what the market does and it is important to take stock of where things are and what is likely to happen given the current market environment. I like to think of this as making a money map instead of looking at a hazy crystal ball. First we need to look back for a moment and take some lessons from where we have come from. It is very difficult to talk about 2009 without also looking at 2008, because it is the banking crisis, bear market, and stock market crash of that year that led to the market action in 2009. In 2008 the big thing I took away from the banking crisis and stock market collapse was how incompetent the so called professionals were. Not only had some of the nation’s highest paid business

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Page 1: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

2010 Stock Market Money Map

January 4th, 2010 marks my birthday and the first trading day of not only a new year, but a new

decade too. Right now you can go to the newsstand and see all of the financial publications promise to

give you their predictions for 2010. They do this every year and almost every year all of the experts say

the market is going to go higher. The only thing they really dispute is how high they think it will go.

Really I find such predictions fairly useless, because they don’t tell me anything about how to

make money. Instead of making predictions for you, I want to spend this time of year looking back at

what lessons we need to learn from the past year and then make a plan on how we can best make

money in 2010. Every year the market changes a little bit and new sectors rise up to lead the market no

matter what the market does and it is important to take stock of where things are and what is likely to

happen given the current market environment. I like to think of this as making a money map instead of

looking at a hazy crystal ball.

First we need to look back for a moment and take some lessons from where we have come

from. It is very difficult to talk about 2009 without also looking at 2008, because it is the banking crisis,

bear market, and stock market crash of that year that led to the market action in 2009.

In 2008 the big thing I took away from the banking crisis and stock market collapse was how

incompetent the so called professionals were. Not only had some of the nation’s highest paid business

Page 2: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

leaders driven their companies into the ground, especially in the banking industry, but well over a third

of hedge funds had blown up and would no longer be trading in 2009.

People cried out about the bank bailouts and what seemed like growing government corruption

in things like all of the pork in the economic bailout bill, but in the end the financial crisis wasn’t a

symbol of corruption, but incompetence.

To make money in the stock market there has to be a winner and loser in the end and the

average Joe has the perception that Wall Street is full of super smart people with some sort of inside

edge, but the 2008 stock market collapse proved that this wasn’t the case at all. Most people in banking

and on Wall Street had no idea what they were doing. They were simply riding the tide of easy money

being pumped out by the Federal Reserve which had caused home and stock prices to rise for the past

several years.

Economic recessions expose businesses that have over extended themselves while provide

report cards for stock brokers, investment advisors, and money managers. Those that fail to protect

their clients’ money are simply empty suits. They only know how to buy and hold and have no

conception of controlling risk or that they need to adapt when the overall trend of the market changes.

The bear market showed you and me how completely incompetent most of Wall Street is. How

many guests on CNBC did we see call bottoms over and over again in 2008? Now 2009 taught me all

over again how important it is to stay focused on the overall trend of the market and a mistake I made in

the first half of the year showed me how important it is to be pay extra attention when the stock market

starts to make a transition from a bear to a bull cycle of vice versa. It is those moments that are most

critical to investing and where it is so easy to make a mistake that can be compounded to ruin you. They

also usually come after you have made a lot of money in the stock market so it is easy for people to miss

something.

Page 3: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

I have almost 2,000 premium members to my website now and well over 40,000 email readers.

I communicate with hundreds of people a week via email and more on blog posts and occasionally

survey my entire email list to get an idea of what people are thinking and doing in the stock market. In

the Fall of 2007 I warned people that a new bear market was coming and told them to get out. I made a

lot of money that year by shorting the stock market and said that summer I thought a stock market

crash was going to happen. Now things didn’t turn out exactly how I thought, because I thought gold

was going to go when the market fell and it went down with the market, but I got the overall picture

right.

In 2009 I didn’t call the March bottom, in fact I made some bad trades personally in the first half

of the year that put my account in the red for a few months – something that hasn’t happened to me

since I first started trading (that is how tough the past two years have been) - but a few months after the

bottom came in I declared that we were not simply seeing a bear market rally but a new cyclical bull-

market that would at least last until the end of 2009 and probably into 2010. I recommended about ten

stocks in the summer that ended up going up huge – most of them were stocks related to China and

gold, but there were a few nice airlines, big caps, and telecom dividend paying stocks in the mix too.

As the market went up I added more stocks to my portfolio and then cashed out of my gains

going into the end of the year. I will talk more about that a little later, because I don’t want to get ahead

of myself yet. I didn’t play everything perfect. I didn’t buy on the exact bottom or sell on the exact top,

but I can look back on the past two years and know that I managed them better than just about anyone

else I know. Where most people are still down big time from the peak of 2007, I’m up big.

I’ll get to my mistakes in a minute, but there are two big reasons why I have been able to make

money in the past two years that you can apply going forward. In fact I think they are the ONLY way you

Page 4: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

will be able to make money in the stock market going forward. They are the two key lessons you need

to take away from the past two years.

First of all I did not focus on the news about the economy and what the experts were saying. In

2007 as the market was topping out almost all of the experts stayed bullish on the stock market and

very few people thought the economy was going to slow down. All of the talk at the moment was how

the Fed was going to lower rates and keep everything going great. It seems so long ago and is so

different from what ended up happening that it is hard to remember how positive everyone was then.

And this year we have been in the middle of a tough recession - the economy is still slow – and

yet the stock market bottomed and went up anyway. The news really didn’t get any better and yet the

market kept going up. When the economic news was good in 2007 the market was peaking and when

the news was bad this year the market went up.

You cannot make any money in the stock market by focusing on economic news and what the

experts are saying about it. Truth is the stock market tends to peak out when all of the news is great

and bottom at least six months before an economic recovery gets going. And even worse it is almost

impossible to base investment decisions on your own guesses of what the economy is going to do. The

top economists can’t do it. If they could they’d be rich in the stock market.

Unfortunately the average investor does nothing but focus on the news. When the market goes

down they just hold their positions and watch TV in order to hear someone tell them what they want to

hear – that they should hold on. Then after they lose money they think everything is bad and get

mesmerized by all of the negative news and fail to realize that they are actually missing a great buying

opportunity in the stock market.

Page 5: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

If you focus on the news you’ll lose money and trying to figure out where the economy is going

and when doesn’t do you any good, because it is impossible to do and doesn’t always matter for stocks

anyway. When you are investing you shouldn’t get anxious and depressed when the economy is bad.

In fact even in business you shouldn’t let a recession get you down either.

Recessions and bear markets do not destroy everyone! Some investors profit by shorting as the

market drops and taking advantage of the low stock prices the bear market brings them. That’s what

WSW Power Investors have been doing the past two years. And in the business world what recessions

do is force those that really shouldn’t be in business anyway out of business. The best run businesses

stay alive while those that are redundant, not run well, or overleveraged disappear.

It’s tough that people lose their jobs and I know a lot of people who have, but in the end the

recession will eventually pave the way for a new economic boom by building up savings and putting the

most efficient and creative businessmen in a position to innovate and prosper. And there will be some

who have lost their jobs who will now go into better careers than what they had before.

I’m trying to get you to think positive about things, instead of get sucked up in the negativity,

because that is the only way you can better yourself personally and be a successful investor. And if you

are in the business world you can actually thrive in this type of economic environment with that type of

attitude.

Take the WallStreetWindow website. Memberships to the free email list and the premium

service have boomed in the past two years so much so that I actually have to put my foot on the break

to make sure the rate of growth in the private members section doesn’t get out of control. The reason

why this has happened isn’t just because we have been among the best sites in navigating the market

over the past two years and provide great value for our members, but also because a lot of our

Page 6: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

competitors have simply disappeared during this time and most of those that haven’t got terrified by the

recession and decided to stop advertising so they have stopped growing.

Instead of getting scared and hunkering down I have focused on two things – how to provide

even more value for you by doing things others aren’t and attracting more people to put the site in the

position of being a leader in the investment world. I’m involved in another bricks and mortar service

business that is booming too in this recession thanks to the same attitude shared among its owners. We

created about 30 jobs in 2009 and will create 30 more next year with no government “bailout” or

“stimulus” money while all of the competitors are just sitting there scared and some are closing up.

Again I talk about this, because I want you to have a winning attitude when it comes to the stock

market. Most people simply got so discouraged by the stock market collapse that they gave up on the

market. It is those that took it as a wake-up call to learn more about investing and managing money

that actually benefited from the bear market. And the only reason they did this is because they believed

in themselves. Those are the kind of people who have joined my site.

And that comes to the second lesson I want you to take away from everything. All of this begs a

simple question if you can’t make money in the stock market by following the news than how can you

make money? The answer is simple – understand how to read stock market trends and stay aligned

with them as much as possible. That has required a bit of market timing in the last decade, while in the

two decades before it buy and hold made the most money. The buy and holders didn’t adjust in 2000

and got burned.

I know this goes against the buy and hold logic still taught to you by Wall Street and the typical

broker and investment advisor who wants to keep you in mutual funds so that they can make money

from fees, but it is more true now than ever before.

Page 7: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

Consider this fact. We are now entering a new decade. The last decade was the worst decade

in 200 years for the stock market. Many investors got into the market in the late 1980’s or 1990’s,

which was the second best decade in the history of the US stock market with a 17.6% average annual

return. Well the last decade was the worst decade ever, even worse than the Depression years of the

1930’s that saw a 0.2% decline overall for stocks.

Investors who simply did buy and hold have done nothing. Even bonds beat them. However,

some investors did well. Those that invested in gold in 2002 did great and those that simply kept their

pulse on the big trends of the market and engaged in a little market timing did even better.

The thing is it isn’t that hard to do. All you need to do is recognize the large trend of the market

by looking at the relation of the major market averages to their 150 and 200-day moving averages and

the slope of those averages. I’ve talked about this with you before and have a whole module about it in

the Stock Market Mastery Course.

The key is doing this enables you to tell whether the market is in a bull market, bear market, or a

transition period. No it doesn’t tell you when the exact top and bottom occurs, but it tells you how to

think about the big picture. Going beyond that there are all sorts of indicators you can follow to get an

idea of the smaller trends, but in the end recognizing the big trend and adapting when it changes is the

key to making the big money.

This is what enabled me to making money shorting in 2008 when everyone else lost money and

to believe that the market was going to go higher this past summer when most were calling tops and

profit from that belief the rest of the year.

Right now the market averages are still above these moving averages so it doesn’t make sense

to start to worry about a bear market. However, right now isn’t a great entry point to start buying long-

Page 8: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

term positions in stocks blindly, because the market has indeed run up tremendously and there are

important historical precedents that should play out in 2010 that you need to be aware of and can profit

from.

We are in a cyclical bull market within a secular bear market. That is an important distinction.

Most cyclical bull markets in secular bear markets only last one or two years. You can look back at 200

years of historical data in the US stock market and look at other markets that got in a similar position to

ours and see a similar pattern that is likely to play out this year.

Simply put after a major bottom in a secular bear market like we saw last year typically the stock

market will rally back up and take back a good half to two-thirds of its losses and then stall out and go

sideways for at least 6-8 months. It then either breaks out and goes on another huge tear for a few

months or rolls over and begins another bear market.

I’ll show you the examples in a minute, but I want you to realize first what this means is that the

market is likely to put in a peak within the next few weeks (if it hasn’t already, it is possible) and then go

sideways for at least the first two quarters of this year. This sideways pattern will either mark a

consolidation phase within this current cyclical bull market that will be a prelude to another huge rally

or else will mark a stage three topping phase.

I have no interest in trying to predict which will occur, because I’m not going to delude myself or

you into thinking I can predict the future of the economy so perfectly and it isn’t necessary to make such

predictions at all to make money. I’ve got some guesses about it as I’m sure you do too, but I know that

trying to predict such things may be dangerous to do, because you might focus on them and the news

that backs them up instead of real market trends and it isn’t how money is made anyway.

Page 9: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

We have been in a powerful rally since March in which the market has had only one pullback of

significance in last May through July. The people who have made the most money are those that bought

the dips and ignored the negative news and short-term pullbacks and have held on. I’ve done that

myself most of the time, but there is always a danger in investing that when you are making lots of

money using a strategy that when the market changes and the strategy is no longer the way to go that

you miss the turn.

That is the mistake I made in the beginning of 2009. I made a huge amount of money in 2008

shorting the market and took profits in the middle of the Fall 2008 stock market crash on short positions

and went to cash going into the end of that year. I knew that the next big opportunity to make huge

money in the market would be in 2009 when the stock market finally bottomed. But as the year started

I started to look at short-term trends in markets and individual stocks and got caught up trying to trade

them. I ended up making small losses, putting myself behind, and getting distracted from the big trends

of the market. This made it so I missed the bottom and didn’t fully adjust to what was happening until

the summer. Once I did though I made up my losses and got back to where I’ve always been in the stock

market – making money when aligned with the broad market trend.

But the key is no one is perfect. And along with ignoring the big trends of the market – which is

the mistake the typical investor makes – the professional investor or the trader often makes the mistake

of getting caught up watching the market too carefully. A key to following the big trends is patience and

it is impatience that costs the professional investor or trader more money than anything else.

Everything outside of you is geared to make you impatient and want to trade. When you are a

broker or money manager or running a service like mine you feel like you need to make money all of the

time for people and that can make you look for opportunities when it is best to just sit back. And the

professional trader more often than not cannot stop trading.

Page 10: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

The most dangerous time for the professional trader is after he or she has made a lot of money

in the stock market using the same strategy over and over again. The strategy is working that well,

because it is aligned with the market, but that very fact can lead to the mistake of ignoring the market

trend when it changes or taking bigger risks.

I suspect the next few weeks will be a danger point in the markets for most people. The market

has been going up and rewarding people, but at some point the trend in the market will change and it

will be at that time that most people will be unprepared.

No one can sell at a top. You always either do so too soon or too late and one reason I decided

to take my profits at the end of the year was to insure that I would adapt to changing market conditions

in 2010. It is very important to start the year off as best as you can, because you do not want to make

some critical mistakes in the beginning of the year and then spend the rest of the year trying to fix them.

During the past two months we have seen the market spend most of its time trading in a very

narrow range. During this time every time the market got near the top of the range the bulls would get

excited and think the market was going to break out and go on a tear and every time the market has

fallen down to support or bad news has gotten out the bears have come out with predictions of doom

and the short sellers have gotten excited and then disappointed as the market held up and bounced

back up. This cycle has repeated over and over again during this time and I’ve sure you’ve gotten caught

up in some of these emotions too.

I want you to think back on these weeks and picture them as a microcosm for the first half of

2010. I suspect the market will trade in a wide 15-20% range for most of 2010 during which people will

get overly bearish on the pullbacks and too excited on the rallies. The problem is most people will either

be too bullish or bearish during this time and will end up getting shaken out of their positions or trying

to trade too much. The bulls will try to hold on too long while the bears will make the mistake of

Page 11: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

thinking every temporary dip is a new crash. They didn’t realize that the market environment had

changed, because they focused on their own hopes and the news instead of real market trends.

But money can be made by buying on the bottoms of this trading range and then being willing

to take profits once the market goes up. Then simply sitting and waiting for the next bottom. If the

trading range marks a consolidation phase then at some point towards the end of the phase it will be

time to buy and hold into the sectors that will lead on the next bull run, but until that time (and yes I

believe it can be identified) it will make more sense to have a trading mentality in which you are willing

to set profit targets and just take them then to try to buy and hold.

And if the market is really going into a bear market then it will still spend the first 3-6 months of

next 2010 going sideways in a range, but instead of consolidating it will be making a top. There will be

warning signs that a top is being put in place, such as deterioration in the advance/decline line, growing

bullish sentiment in a market just going sideways, and negative action in the commodity markets. But

even if a bear market hits in the second half of 2010 most bears will be too early to the game.

I doubt we are going to see a huge bear attack in 2010, but I know that a bearish scenario is

possible and I’ll have my eyes on watch for that possibility. I really cannot look that far ahead into the

future though. I don’t want to give you my guesses, but only keep you informed on what the stock

market is really doing and when it comes to the stock market the most likely thing it is going to do is go

sideways in the first half of 2010 and then make a big move one way or the other towards the end of the

year. And that is enough to know to make big money.

Again the reason why I think we are likely to see a wide sideways range in the first half of 2010 is

because if you look back at past market history after the market has had a major collapse and then came

back within a secular bear market it has entered a sideways pattern for at least six months before

making another big move. I’m starting to get worried that we are near the end of the current move.

Page 12: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

Towards the end of December the market did manage to go to a new high, but it do so in a much less

explosive manner than it has in past rallies. It may still go higher from here, but I think when you ask

what is the next big trend of the market it is going to be a sideways range once the current move ends.

To see how that type of thing plays out let me show you some of the examples I’ve been looking

at:

The current market environment is incredibly similar to what happened during the last cyclical

bull market, which began after the March 2003 stock market bottom. After that bottom the market

rallied sharply and then peaked in January 2004. After that peak it then traded in a range until the Fall

of 2004 after which it broke out and resumed its march upwards, but that trading range lasted a little

over eight months and shook both bears and bulls out of the market.

Page 13: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

A few sectors did well and bucked the overall sideways trend and were easy places to make

money – and that is another thing we will be on the lookout for in 2010 – but the overall market was a

difficult place to buy and hold or to try to short in the belief that every dip was the start of a crash.

Once the current end of the year move ends I expect that 2010 is going to be dominated by a

similar trading range as what we saw in 2004. What causes these ranges is the simple fact that after

huge moves one way or the other the market almost always spends a period of time digesting the move,

before making another big one.

In fact the 2010 trading range may last all year – much longer than the one in 2004. The reason

why is that the stock market has had a period of EXTREME and historically ABNORMAL volatility in the

past two years – in fact the market moves have been so extreme that it is difficult to find anything that

compares. It has been extreme on the downside and on the upside.

Page 14: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

This has caused the 200-day Bollinger bands, which measure market volatility drawn on green

on the above charts to widen at a point way past what was seen 2003 bottom last year. Normally

periods of extreme volatility are followed by periods in which the volatility shrinks – that’s what causes a

trading range and paves the way for another big move.

In secular bull markets the market tends to rally up sharply in spurts and then pause long

enough for the 200-day Bollinger bands to come back together before spurting up again. You can see

how this happened several times in the last cyclical bull market – once in 2004, then again in 2005, 2006,

and finally in 2007. It would probably take a year for the Bollinger bands to get that close together again

and would mean the market would likely spend 2010 in a range between the 1175 area of the S&P 500

at the top and 950-1000 on the bottom.

That best comparison to now may be the 1970’s during the last secular bear market for the US

stock market. The ultimate bottom of that bear market was in December 1974, just as last March was

likely the true bottom of this secular bear. But it is worthwhile to see what happened after the 1975

cyclical bull market:

Page 15: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

As you can see after the market bottomed in 1974 it went up huge in 1975 and then spent the

next year basically doing nothing.

Page 16: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

Some people like to compare the current market environment and even the economy to that of

the Great Depression. Well after the market rallied off of the Depression lows in 1933 it then spent all

of 1934 going sideways. The market more almost more than doubled from the low of 1933 to the top of

1934 in less than six months. Well extreme moves that create huge volatility are followed by periods in

which the volatility shrinks. That’s why the market went sideways for almost two years after that 1933

peak.

The point of all of this is that there is no way I can predict where the stock market is going to

close at in 2010. But what I can tell you for sure is this – we have gone through a period of extreme

market volatility in the past two years and historically such periods of extreme volatility are followed by

the opposite – a long period in which the market simply trades sideways.

Page 17: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

We have seen action the past two years in the S&P 500, Nasdaq, and DOW that truly are very

unusual. That has caused most people to lose money and suffer, but when you have been positioned

correctly with the market averages you have been able to make a huge amount of money. For example,

I made 50% by shorting the market a couple of times in 2008 for example and made a nice 20%+ gain in

the last few months of 2009.

To make big gains like that playing the market averages requires a high degree of market

volatility – it requires big swings either way in the market. What I’m asserting to you is that these huge

swings have been historically ANBORMAL in the stock market and we have simply become so

accustomed to them that we expect them to continue. In reality they probably won’t.

Most people are not really prepared for that. They are caught up expecting a huge rally in the

stock market or for a big market crash in 2009, when neither are likely to occur. And even if the bears

are right about them market it will take months for the market to truly get bearish again and even then

the downside what would be limited.

What this will make for is a market environment that will cause most people to lose money

through over trading. People who have been accustomed to huge market moves will try to repeat the

strategies they used to make money in the past few years in 2010 only to be disappointed or shaken out

over and over again. Instead of stepping back and being patient for things to line up for them or getting

into better sectors and markets they’ll get sucked into one sub-par trade after another.

It is simply going to be tough to make money trading the broad market averages. Money will be

made by looking away from the Nasdaq, S&P 500, and DOW into other foreign markets that haven’t

been quite as volatile than the US markets and are in a better position to go up and in individual sectors

that can go into bull markets over their own.

Page 18: 2010 Stock Market Money Map - WallStreetWindow.com · And this year we have been in the middle of a tough recession - the economy is still slow – and yet the stock market bottomed

In the stagflationary 1970’s during the decade of dead stock returns gold and energy stocks

went up as a result of the inflationary trend. Despite the recessionary environment pockets of economic

growth and innovation still occurred. Casino stocks for instance were very hot thanks to the opening of

new casinos in Atlantic City and Las Vegas. People who invested in the right places made money while

those that didn’t – well they didn’t. And in 2004 when the market went sideways all year gold and oil

stocks went up then too.

Even though the typical buy and hold investor has had a tough time this past decade it has been

a great decade for traders who have benefited from the huge swings in the market. In the final analysis

the recent years though have been a period of ABNORMAL swings in the overall market averages and

this behavior is likely to come to an end this year. That means it is going to start to be tough for the

typical market timer to make money too.

We will have to focus more and more next year and in the years to come on sectors – may they

be in other world markets or select ones in the US – that are in positions of their own to go up in order

to make money. The same tools and methods always work in the investment world to make money, the

key is to apply them to the places that are most profitable. Paying attention to the economic news on

TV is going to be of even less use than it has been. Only the true contrarians will win. Making money

will require doing more work to find the pockets of bullish strength in a few select US sectors and in the

best foreign markets. That will be the only way to find the winning stocks.

My whole goal in 2010 is to find these stocks for you using The Two Fold Formula which

combines both technical and fundamental analysis to invest in the stocks that have the best chart

characteristics and are truly cheaply valued and have high earnings growth. Over the years I have found

that these are the stocks that go up the most every year and I think it will be more important than ever

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to invest in these stocks next year, because I think the market as a whole is simply going to go sideways

and provide you with very little return.

On Tuesday, January 5th, 2010 I’m going to open up the WSW Power Investor Service to 500 new

people. I’ll send you an email with your activation link at 12:00 PM EST on that day. Once you sign up

for it you'll get much more detailed commentary from me on current markets trends all year long and

much more.

It includes weekly market analysis from me, daily bulletins when market activity calls for your

attention, and a stock picks portfolio. Of course you'll also get personal access to me through the

website. As a free bonus you'll also get all seven modules of my Stock Market Mastery Course. This is a

complete course with hours of videos, multiple PDF guides, and more. The titles of the modules are:

Module 1 - Mind Over Matter - The Psychology of Trading - While most investors try to control their

emotions and block them out I'll show you how winning traders seemingly invest effortlessly with real

confidence and how you can easily achieve this.

Module 2 - The Building Blocks of Technical Analysis - How to tell for sure if a market is in a bull or bear

market with one look at a chart so you won't miss out on huge gains or become a financial body bag in a

vicious bear market.

Module 3 - Magic Indicators - How to use the right technical indicators to compliment your analysis of a

stock and not get rigidly trapped by them or overwhelmed using the wrong ones.

Module 4- Swing Trading Tactics - How swing trading can actually be used to reduce the overall risk in

your portfolio so you will maximize your returns and limit any losses.

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Module 5 – Break Through Trading By Timing Your Entry Point To Perfection - How to clearly define

your entry point in a trade and know exactly where you should put a stop loss order for risk

management.

Module 6 – Get Out at the Top and Maximize Your Profits - Know the warning signs that spot a market

top forming months in advance before a bear market breaks out and eats everyone alive.

Module 7 – Secret Weapons of Champion Traders - Discover money management techniques to

properly diversify your portfolio in order to generate the greatest return with the lowest amount of risk.

As you can tell from the titles each lesson is much more detailed and specific than the

educational presentations you have seen so far. They have a lot more material in them.

Here is the thing though - If you do a Google search on the Internet you will find that people sell

similar courses for over $1,000 and sometimes as much as $2,000. I was originally going to sell this

course separately to you later this year, but decided to give it to you as a free bonus.

The reason why I am doing this is that I want you to be a happy customer once you become a

member of WallStreetWindow Power Investor. My goal is to build a long-term relationship with you

built on mutual success and over delivering on my part.

Those guys who sell courses for over $1,000 a pop charge so much, because they have nothing

else to really offer you. If they have a subscription product to go along with their course they don't feel

confident about it. Therefore, they feel like they have to get as much money out of their customers as

quickly as possible.

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My whole goal is to provide you with as much value as I can so that you will become a long-term

WallStreetWindow Power Investor member.

To do that I rather give you the Stock Market Mastery Course for free with the membership

even though it is probably worth more than the price of the membership by itself, because I know that

once you go through the course you will feel much more confident about investing in the stock market

and that in turn will make you a better investor who can use the information I give you and may even

make you into a valued contributor to our insider community. I benefit from your success so I have an

interest in seeing you succeed as much as possible.

Now you need to know that I limit the new memberships to only a small number of people and

only a few times a year for a number of reasons. First I consider Power Investor a training program for

new people that takes a lot of work on my part, because it requires me to answer lots of email questions

from new members. In the past so many people were signing up that I decided I really could no longer

handle it, because I no longer had the time to constantly answer emails from new people. So I decided

to just accept new people only a few times a year so the influx of new people would happen in a narrow

window of time instead of all of the time. I also wanted to make my service more valuable to current

subscribers and by keeping it limited to a small number of people this does that for them.

There is another big reason that I have to keep this offer limited to only 500 people, but I can't

reveal this reason until I actually put the offer page up. Once you read it you will understand why. I'm

going to try something that no one has ever tried to do in this industry before, but I cannot reveal it to

you until I put the offer page up or it could blow up in my face. I'm just asking you to trust me on this

and be patient another day before you can get all of the details. I have to keep it a secret until then for

my own safety. It worked well in the past but still makes me nervous.

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I'll notify you via email on Tuesday 12PM EST as soon as the email page is live. Be on the

lookout for this email, because when I last opened up the WSW Power Investor service months ago it

sold out suddenly and I don't plan on doing it again until next summer at a much higher price.

I don't want to put any pressure on you, but you need to know that back then there were about

32,000 people on this email list and now there are 44,000 people so it may sell out even faster.

Also I have an old list with over 80,000 emails on it that goes all of the way back to 1999.

Because the list is so old though most of these emails are no longer active. I estimate there are probably

only 10,000 active readers on it. So that is around 56,000 people all together who get my stuff making a

sellout on Tuesday pretty much a sure thing.

But whether you become a member or not let’s make 2010 your best year yet in the stock

market! I don’t think most people will be saying this a year from now, but it’s possible for you when you

are in the right stocks.